A recent report from the National Competitiveness Council of Ireland has shown that its reliance on a few major multinationals leaves the economy vulnerable.
One third of Irish exports come from just five companies. And the big players in the tech and pharma sectors are responsible for huge amounts of economic activity, productivity growth and tax revenue.
The NCC bulletin said a small number of firms in the pharma and tech sectors are contributing to large proportions of exports, driving up growth. In turn, this disguises many smaller firms where productivity is stagnant, posing significant challenges to Government policy.
The NCC is calling for a major effort to help indigenous firms grow and diversify into new markets, as well as a new focus on wider competitiveness.
Tax problems have plagued Ireland, with 10 firms pay 40 percent of corporate tax collected there overall. This is due to Ireland’s status as a ‘tax haven’.
The NCC bulletin ranges over the economy’s reliance on tech and pharma companies. It points out that five firms account for one third of exports. 75 percent of exports are accounted for by just 50 companies, a much higher concentration than most other economies.
They are also highly productive to overall output, whereas the rest of industry is in decline.
Ireland is vulnerable to market shocks like changes in the fortunes of a few big US firms.
Economist Peter Clinch has warned that “Ireland is relying on one big engine as we fly into much stormier skies”.

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